Tax Time Gives Identity Thieves Many Happy Returns

While many Americans think of tax time as a prime occasion when money heads out the door, identity thieves think of it in just the opposite manner. This is because tax season means W-2s and other papers with names and Social Security numbers flooding into mailboxes across the country. And if taxpayers don’t keep them, they flood right back out, populating vulnerable trash cans and recycling bins. Some people save their tax information to their computers as well, which can be a gift for hackers that break in to wireless networks to steal data. Like paying the IRS didn’t give you enough to worry about!

Don’t worry too much. There are simple things you can do to keep your tax information where it belongs:

• Check your mailbox early and often until you have all of your tax forms safe in hand. You should receive all of your W-2 forms by February 15 at the latest. If you don’t call the IRS at (800) 829-1040. Sometimes it is just an inefficient company late with mailing their paperwork, but other times it could be the result of a thief stealing or intercepting your mail.
• If you’re mailing your returns, do so at the post office or at least by dropping them in a locked mailbox. If you stick them in a traditional mailbox and put up the flag, it tells the thieves exactly where they should strike next, especially as April 15 gets close.
• Shred any tax forms that you don’t need to keep before throwing them out or recycling them. If you don’t have a shredder, hang on to them. When you have a big stack, get all the papers shredded at your local office supply store.
• For efiling, go with a reputable company. Unfortunately, there are fake sites out there designed just to steal your personal information. For a list of companies that are IRS approved, go to www.irs.gov/efile.
• Make sure your antivirus and antispyware software is up to date before you enter any tax information on your computer, whether you plan to efile or you just want to make a few calculations in QuickBooks.

You may think that taking all of these precautions is a complete waste of time, since identity theft would never happen to you. However, you should know that 8.4 million Americans were victimized in 2007 alone according to Javelin Strategy & Research. It’s likely that most of those people thought it would never happen to them either.

Tax time is a good a time as any to assess your family finances. Look into whether you can afford to invest in an identity theft protection service. You can get one for yourself, for your spouse and even for your children and some cost just pennies a day. You may find out that the question isn’t whether you can afford it, but rather with the risk ever growing, whether you can afford not to.